78-631: International Business

Iceland

Country Report

Date: 9th, July 2013
Map of Iceland

Table of Contents

Basic information 1
The Cultural Environment 2
The Political and Legal environment 3
The Economic Environment 4
Globalization and Society 5
The Foreign Exchange Market 6
The Strategy of International Business 8
The Organization of International Business 9
Marketing Globally 10
Reference 11

Basic information

Iceland is an island located in the North Atlantic Ocean east of Greenland and immediately south of the Arctic Circle. It is a highly developed country with a stable democracy. Also, Iceland is a country of extreme contrasts. It is a place where fire and ice co-exist.

Flag: Blue with a red cross outlined in white fimbration, extending to the edges of the flag. The colors are symbolic for three of the elements that make up the island: red is for the volcanic fires, white recalls the snow and glaciers, and blue is for the skies above.
Capital: Reykjavik
Main municipalities: Kópavogur; Hafnarfjördur; Akureyri; Reykjanesbær
Area: 103,000 sq km (39,769 sq miles)
Official language: Icelandic
Currency: The Icelandic monetary unit is the króna (plural krónur) – ISK
Population: 319,014 (2011)
President: Olafur Ragnar Grimsson
Prime minister: Sigmundur Davíð Gunnlaugsson
Government: Constitutional republic, Parliamentary republic
GDP: $13 billion
Unemployment rate: 7%
International dialing code: +354
Time: UTC+0
Transport: no trains in Iceland, but there is an extensive bus network

The Cultural Environment
Culture refers to learned norms based on the values, attitudes, and beliefs of a group of people. Iceland’s unique nature, closely-knit population, and enterprising spirit have all contributed to a dynamic, original cultural scene.Those who do business with Iceland have developed friendly lifelong relationships with their counterparts. Icelandic business culture is professional and personal. Iceland is a small country—people tend to know one another and make friends quickly. Those who do business with Iceland have developed friendly lifelong relationships with their counterparts. Iceland's first settlers were businessmen, first and foremost. Such age-old traditions of making fair trades and honoring agreements still influence Icelandic business culture today. You will find that Icelanders value honesty, accountability, independence, and friendship. Keeping one's word carries the same weight as legal and contractual arrangements. Also, Icelandic companies are generally more streamlined than in other countries, lacking the extensive hierarchies known throughout the rest of Europe and North America. Don't be surprised if you sit down for a meeting with one colleague only to have the CEO walk in for a direct chat. In addition, according to the textbook, language and religion are the cultural stabilizers, so it is necessary to talk about these two aspects:
Language
Iceland does not have an official language but Icelandic is the de facto official and national language, while Icelandic Sign Language was officially recognized by law in 2011 as a minority language with constitutional rights and the first language of the Icelandic deaf community. Danish is also a minority language in Iceland, and has been spoken there for at least two hundred years, but it has yet to gain government recognition. Temporary visitors and residents often make up a large portion of the population, especially in the capital Reykjavik. Thus, varying greatly from day to day, languages such as Basque, Dutch or Japanese may be prominent on the city's streets. To sum up, there are a variety of languages exist in Iceland.

Religion
The State Church is the Evangelical Lutheran Church, of which 92.2 percent of the population is nominal even if they are not practicing members.